Reported by Bahiyah Shabazz, MBA
The thought of unemployment can take a toll on a person’s emotional and mental state. As with anything else in life, you must adjust to your surroundings. Eventually all the networking and life skills building pays off with an offering conversation.
It’s been awhile since you’ve seen a steady paycheck along with benefits and perks. The first decision is to declare your exemptions. Married or single, dependents, or head of household. When declaring more exemptions you have a bigger paycheck. When declaring less exemptions you have a smaller paycheck. The decision should be based on accurate information in addition to your needs.
Rule of thumb: If you take out too much money then Uncle Sam has the luxury to work with the funds as the government sees fit. When you have a larger paycheck you can maneuver your funds as needed.
Establish Direct Deposit
“Out of sight, out of mind.” When your monies aren’t in your hands you can save and focus much better. Although I do promote shopping with cash (at times) it’s strictly to make sure you only spend what you intended. Direct deposit gives you the ease of mind of knowing in spite of rain, shine, snow or sleet your check is electronically delivered. You won’t have to wait for a paper check to possibly be delayed in an unforeseen event.
It’s time to tackle your debt
With a steady paycheck in the household you can easily create a plan to eradicate all your debt from credit cards to student loans. Start with the smallest bill and increase your payments as you erase the balances.
Increase your emergency fund
A lesson learned was the lesson you experienced from being out of employment. Not too many people save enough for expenses. You also never would’ve thought of collecting unemployment benefits for more than a year. Instead of saving 8 months of expenses, I suggest 12 months of expenses.
You’ve already managed to live on a limited income during your rough times, it won’t be difficult to continue to cut back on expenses until you accomplish your financial goals.
Once you pay off your debt you can increase possibly double your savings and investments.
Invest in your retirement fund
The maximum you can contribute is $16,500 if you’re under 50 years old. I know there were some seasoned employees who were also a victim of unemployment. If you’re over 50 years old then your maximum contribution is $22,000. Let’s not forget a supplemental investment. Yes, IRA! Don’t forget…if you can afford to put away $5000 maximum if under 50 years and $6000 maximum if over 50 years, then do so .
In spite of all that you’ve gone through remember that you are able of succeeding and accomplishing your goals. There are times when people question their path when it’s not for you to attempt to figure out. It’s for you to understand and appreciate the lesson being taught.
“Love Yourself Enough To Support Yourself.”
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